As I was traveling to the International SalonSpa Business Network in Amelia Island, Florida, this week, I took a moment to identify seven mid-year trends that will continue to impact the beauty industry in the near future. As you begin your planning for the end of 2011 and into 2012, keep these top trends in mind:
The sputtering economy, driven by global political and economic dynamics, is creating new realities. Three major factors will continue to impact the beauty industry for the rest of this year.
First, unemployment continues to hover at 9% and does not factor in what we call under-employment (people who have had hours and wages/benefits cut). We do not see any quick fix to this, especially as technology erodes new job creation. We wonder how long the government can afford to prop up benefits.
Second, high-energy costs are going to continue to dampen consumer spending and while we doubt there will be an inflationary spiral, there will be inflationary pressures in both energy and food prices that account for a large portion of consumer disposable income. This will have an impact on beauty industry spending.
Finally, personal finances will continue to be pressured as local taxes will undoubtedly rise and more services will be reduced across all levels of government. We see foreclosures continuing and depression in the home buying and building market. We see a small return to credit card usage but the frugal consumer that arose from the Great Recession will still factor into spending decision-making. Savings and credit expansion may happen but we expect the idea of stretching a dollar to continue and that makes marketing the business of beauty even more important for the balance of 2011.
The "Lipstick Effect" is definitely impacting consumers. A consumer may not be able to afford a new pair of shoes but will spring for a tube of lipstick with a lower price point. Salons and professional brands have to learn how to turn the lipstick effect into more sales for salons. High-value salons are at a greater risk to lose guests compared to value-priced salons. Color services will be stretched unless salons develop new ways to offer lower cost services. Professional beauty brands need to find new ways to promote themselves in this new economic landscape.
Social media (Facebook) is the hot new marketing trend. No one has found the magic key to create effective content to influence sales. It is good to stay connected with guests, but the goal is to create new guests and increase sales. Salons and brands should embrace social media and mobile technologies, but not at the expense of reducing other proven marketing tactics to grow the business.